Incentive programmes for honest tax payers

Government is planning to give rewards to honest tax payers and put in place an incentive programme to reward and recognise honest taxpayers to encourage a culture of compliance. A committee has been set up under Central Board of Direct Taxes (CBDT) to draw up the scheme, a top official told.

The government has launched several measures to root out black money, including stringent legislation, comprehensive amendments to the benami law and a major crackdown against tax evaders under Operation Clean Money. With a number of deterrents having been put in place, the government feels there is a need to reward honest citizens as more people are filing income-tax returns.

The committee will look at reward programmes instituted in various countries and draw from the best practices, said the official. The selection of people may not be based on the amount of tax paid but on criteria such as regularity in filing of returns, not being penalised or prosecuted and not having been subjected to searches or surveys. The income tax department earlier had a scheme called Samman that rewarded taxpayers, but it was discontinued after 2004.